Multiple Choice
A major disadvantage of using call options to hedge a short position is
A) Hedging increases the risk of loss on the short sale
B) The option premium and commission reduce profit potential
C) The price of the stock may go up
D) None of the above
Correct Answer:

Verified
Correct Answer:
Verified
Related Questions
Q12: If an option is traded on more
Q18: IBM was trading at $100 when Mrs.
Q31: An investor who wishes to take advantage
Q32: A call option selling for $8 with
Q37: If a stock price increased by 76.5
Q46: "In-the-money" and "out-of-the-money" generally mean the same
Q61: The total premium (option price) is a
Q69: If the market price is above the
Q76: Much of the liquidity and ease of
Q78: The Options Clearing Corporation functions as a